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leisure credits

The Changing Face of Timeshare Scams Pt 2

Over the years we have seen various changes in the scams surrounding timeshare, from the development of resorts in the beginning then the resale scam to the latest of the fake law firms. Once the timeshare is purchased then the never ending problem of who to trust emerges. Today we have a brief look at how these scams have changed, the only thing that ties them together is they want your hard earned cash.

The first scams to take place in what should have been a good product was the off-plan purchase. In the early days when timeshare resorts were proliferating, those on holiday were lured to the presentation deck or showrooms to be sold “The Dream”. These “UP’s” or “Unit Prospects” as you are known, were usually picked up off the street by the OPC’s or the touts with the scratch cards, every single person given these cards would win the Star Prize. Then taken to the deck to claim it and sit with a “rep” for the presentation.

They would be shown architects plans and artistic impressions of what the resort would look like, what facilities it would have and the standard of the apartments. Usually photos of existing resorts would be shown to enhance the quality that you would expect. It was also sold as an investment, you were buying into property or real estate, which would go up in value. In essence you were buying a share in your very own holiday home.

A proposed date for completion would be given and then the hard sell kicked in, for just a small deposit you can secure the week and apartment of your choice, if you could not afford the full price a payment plan or finance could be arranged. After all it would be some time before you would be able to use the resort as it still had to be built.

Unfortunately, many of these resorts were never actually completed or even started, what you purchased was a hole in the ground and “The Dream”. Many of these sales took place in destinations such as Portugal, Spain and its Islands. This did give these countries a very bad reputation.

It must also be remembered that these schemes tended to be run by criminals who needed to launder their ill gotten gains from criminal activities in their own countries. That was the start of the word “Timeshare” becoming synonymous with scams.

Once timeshare was established, the resale scam began to appear, many of these were based on the Costa del Sol which had many timeshare resorts. Call centers were set up, usually in apartments and hidden, remember there was no internet at that time, so making checks was virtually impossible.

The caller would introduce themselves and ask if you still owned the timeshare, once this was established the question of have you thought about selling, as the prices of timeshares was increasing. After all the purchaser did think they owned property!

After establishing what the owner had paid and what they owned, the agent calling would come up with a wonderful story of how they had sold recently for almost double the original purchase price. Once the owner had been hooked with the greed factor, then the agent would be needing a payment to list the property for sale. That would be the last you heard from them or your money.

The next move in the resale scam was the guaranteed buyer, or the corporate buyer, these tended to be the Discount Members Holiday Clubs, such as Designer Way Vacation Club and Club Class Concierge.

These originally worked in 2 ways, the pick up off the street or cold line, the call center targeting timeshare owners through lists. The cold line didn’t generally target owners, but once at the presentation they would establish that you did own timeshare.

With the telephone targeting of timeshare owners, they would be told that there was a buyer who was looking for timeshares, usually a corporate buyer. Once you agreed that you would be interested in selling they would invite you to their offices in Spain with free accommodation, to attend a meeting.

Once at the meeting the corporate buyer turned out to be a sales agent for the holiday club, they would take the timeshare off your hands but to do so you had to purchase membership into the club. You would get a discount for the timeshare and in many cases what was known as Cashback, which was another con in itself.

It the turned out that the discounts promised never materialised, the excuse was always the same, sorry not available on those dates. It also turned out that in many cases several year down the line the timeshare company started for non- payment of maintenance fees. The timeshare had not been disposed of as promised.

Thankfully the main culprits have been closed down, but there are still some about, resale scams still exist, but from what we have seen they are mainly targeting French and Belgian owners and are based in Marrakech.

We now move on to the claims sector which has really started to take off since the first Supreme Court rulings against timeshare companies.

Some of these are very sophisticated frauds, such as those of the Tenerife based family of fake law firms which we have dubbed the Litigious Abogados Family. Their method is very well put together, they even have some excellent fake court and procurator documents.

First they contact the owner, (in some cases the timeshare is no longer owned), with the story that the timeshare company is about to be taken to court and you can be in on the case. You are likely to receive thousands in compensation, but you do have to pay a fee to the procurator. Once paid, give it a couple of weeks and you are then notified that the director pleaded guilty and you have been awarded a substantial amount. Unfortunately there is a tax to be paid, which is 20% of the awarded amount, to back this up the unsuspecting timeshare owner is sent fake court documents showing the sentence and a photocopy of the cheque they will receive. Yes you guessed it there was no trial and you have just lost thousands.

Another ploy is the so-called firms calling themselves lawyers or claims companies, the pitch is simple, you have a claim which they will do on a no win no fee basis, great no legal fees upfront. There is one snag though, you need to cancel the contract first, but guess what they can do the relinquishment for you. All you have to do is pay upwards of £5000 and you will be out, then they will start the claim for you.

In some cases these companies have also used the “bait and switch” tactic to sell their own product, “Leisure Credits” (think Monster Credits) which is a discount club (very similar to the holiday club), again not worth the paper the contract is written on.

What we have seen with these particular schemes from many of our readers is simple, they have never received any money for the claim and they are now being chase for around 3 years of back maintenance. Their contract have never been relinquished.

We have seen this with one company that has gone out of business, RSB Legal. They operated for about 3 years so must have taken hundreds of people for tens of thousands of pounds. It must also be said that the UK authorities such as Trading Standards as well as the police are investigating many companies.

Yes, for the poor timeshare owner it is a very perilous world, a veritable minefield where thousands are lost on an almost daily basis, with very little hope of ever recovering what has been paid.

There are some genuine law firms and claims companies, these will not tell you that you have a claim if you don’t, it is not in their interest to take on cases which are not valid. As for relinquishments, many resorts will not deal with third parties, Ona Group, MGM Petchey, MacDonald Resorts, Diamond, Club la Costa and many more, they will only deal direct with the member. Then in most case the fee they charge is usually far less than what you would pay these other companies.

It now remains to be seen what form the next phase of scams will take, these crooks will always find an angle, after all they do want your money!

So the moral of this tale is doing your due diligence and plenty of homework, if you don’t know where to start, then use our contact page. We are here to give you free advice and point you in the right direction.

Start the Week

We start this week with a look at some of the companies we have highlighted over the past few months, many of these are now going into liquidation. These companies are in most case only around two years old and began as “contract termination” with “no win no fee” claims once the contract has been cancelled. We also look at some of those that are under investigation or are in court and those that have even been sentenced.

First we look at RSB Legal, this company first came to our attention back in 2016, there modas operandi was very simple, once they contacted the timeshare owner the offer was to meet at one of their offices to discuss a “no win no fee” claim against the clients timeshare company. This soon turned into a pitch for the cancellation of the contract first, once this had been completed then the claim could go forward.

The one problem was they needed upwards of £6,000 to do the cancellation to be paid in advance, the claim would come later. The question that was asked was how was the claim to be made? After all it couldn’t go to court, especially if it was a timeshare bought in Spain, as once a contract is cancelled then no claim could be taken to court.

This left a Section 75 claim under The Credit Consumer Act 1974, against the credit card company or the finance company if it was purchased with a loan supplied by the timeshare company.

These were unlikely to have paid out, as with all section 75 claims you must show either: you have not received the goods or services paid for; the company has gone into liquidation; faulty goods unfit for purpose. This is fine if you are purchasing say a washing machine, but with a holiday product, especially a timeshare purchased many years ago, you will have used it and taken holidays. Even if the company no longer exists it would be difficult to get a payout.

Section 75 does not cover the misrepresentation of the sales agent at the time of purchase, if it is not in the contract it was never said!

The credit card provider will always contact the company involved to get their side, obviously, they will say that you have received the goods and services, after all you have used it. You may argue that you were unable to use it as you could not get the dates you required, the answer of the timeshare company is always going to be, sorry but these are always subject to availability, we did offer alternatives but the member didn’t want those. Hence claim denied.

Another twist is RSB Legal palmed off the cancellations to another firm Taylor Marshall Associates, a very clever move as if the contract wasn’t cancelled, no claim could be made against RSB Legal under section 75. They would claim that they have fulfilled their part of the contract and it was Taylor Marshall who had not done the work.

This is a scenario that we have seen on many occasions with many of these “Exit Companies”. Once it is passed over the client is then told that they should no longer pay their maintenance fees as their contract will be cancelled within weeks. The unfortunate thing is that nothing was done, the exit company did not carry out the work and the client ends up with several years of maintenance fee arrears. This has been the case with RSB Legal clients passed to Taylor Marshall, especially those members of Club la Costa. In this case CLC had informed RSB and Taylor that they do not recognise them, that they do not deal with third parties, but will cancel a membership directly with the member only and free of charge!

For those clients who have been through this, you can try a section 75 claim, but you should also report to Trading Standards and Action Fraud.

Back in January 2018, we reported on the announcement that Standon Mortimer Associates were the subject of a Creditors’ Voluntary Liquidation. Again this was a company contacting clients for exit and claims, the list of companies they were involved with is quite extensive, including RSB Legal, FHA Marketing along with Anderson Read Consultancy, Warwickshire ConsultantsCharles Ashworth Consultants and Harwood Jones Consulting.

So it looks like all these companies were all working hand in hand, the unifying factor appears they all worked with or for RSB Legal. The unfortunate thing is that many people have paid and lost thousands, yet these companies are limited liability companies and go into liquidation after spiriting the money away leaving no way of retrieving what you have lost. It just makes you wonder what new companies and scams they owners are going to come up with next.

As we know the Regional Organised Crime Unit of Somerset & Avon Police are investigation several Mark Rowe companies, we have also been told by reliable sources that Hollywood Marketing in Tenerife is also under investigation by the Spanish Authorities.

The companies under investigation include sellmytimeshare.tv, Monster Rewards and Monster Credits, yet Mark Rowe is still advertising in the press, facebook and other media his ABC Lawyers, Timeshare-Lawyers and other companies. The unfortunate thing is that many people will believe any advert they see in the press.

A good example is one reader, an elderly lady who saw one of his adverts in the Royal British Legion magazine, so naturally she thought it was genuine. The next thing is she had been sold Monster Credits. As we explained, just because the advert appears in a publication which we know and trust, does not mean it is genuine. After all, the magazine publishers need to sell advertising space to cover costs, they don’t check if advertisers are genuine, they only take the money.

Back in February we also reported on the jailing of several people involved in a long running timeshare scam, this revolved around the resale of timeshare. It then went on to contacting those who paid to sell their timeshare being contacted yet again, this time to get the money back from the original scam. There was then a third part, another company called to say they had been appointed by the Spanish courts to contact clients who had been scammed before, that there was money waiting for them and a tax needed to be paid to release the money.

The full article can be seen by following the link below:

http://insidetimeshare.com/they-get-them-in-the-end/

There is still no news on the sentencing of Dominic O’Reilly or his Daughter Stephanie O’Reilly of EZE Group. From information received this may not be taking place until around September. This leaves it very difficult for those taken in by the Leisure Credits to be able to get their money back. When new information becomes available we will publish it here.

So, we are losing some of these companies, but how long before other surface to take their place, as always, beware the calls offering “no win no fee” claims, the guaranteed exit solution or the “fake” law firm that tells you a case against your timeshare company is about to go to court or has been to court. Check, check and check again, do your homework, contact Inside Timeshare if you want help in checking the validity of any company that has contacted you or even one you have found either on the internet or advertising in the press.

Tomorrow we publish another Tuesday Slot with Irene, this week it is about “Special Assessments” at the Americano Beach Resort.

The Changing Face of Timeshare Scams

Today we look at how timeshare scams have changed over the years, from the original sales to resale, holiday clubs and now for claims. You will be surprised at how they have developed, we will also give you some useful information on what to look for when either searching the web or being contacted.

When timeshare was first being marketed on a large scale during the 1980’s and the boom years of the 1990’s the most common scam was known as the “hole in the ground”. This is where the unsuspecting tourist while on holiday was picked up off the street by the touts with the scratch cards, taken to a resort with a sales deck and subjected to a rather lengthy presentation.

Nothing new there, the difference with this presentation was that the resort the potential client was at, was not what was being sold. That resort had not yet been built, it was in the planning stage, the client was being offered to buy “off-plan”.

off plan

These apartments and weeks would be sold at a discounted price, for example a studio may go for around £2,500, much cheaper than the ones on the resort they were visiting. Many signed up for these timeshares, only to find out later that the resort was never actually built, the marketing company had disappeared along with their money.

It was then towards the end of the 1990’s that the resale market began, many timeshares were sold on the basis that they were real estate, you were buying a portion of the bricks and mortar, so it would go up in value.

One of the early resale scams was started and run by the infamous Toni Muldoon from the Costa del Sol. He had a string of companies, one was known as Platinum Properties.

The scam played on greed, owners would be cold called and asked if they had thought about selling their timeshare. The pitch was very simple, there is a shortage of new timeshares and the prices of second hand ones was increasing due to demand.

The unsuspecting owners would be asked what they owned and what they had paid, the callers would then explain that those were in high demand and fetching very good prices. For example, an owner would say they paid around £5,000 for theirs, yes you guessed it, they would be told that those were now going for about £7,000 on the resale market and going up in value.

Now for only £1,500 Platinum Properties would list this for you, if they were not able to sell this within the 12 months of the contract, the deposit would be returned. That deposit would also be returned once the sale had gone through, as the buyer would pay all the costs. Many took up this offer and that was the last they ever heard from the company again.

Eventually Toni Muldoon was caught and received a 2 year sentence which was then suspended, he was eventually jailed in the UK for other non-timeshare related scams and has been release on parole. He has now set up 2 websites, one relating to timeshare (claims) the other called Scam-Busters. The question is can a leopard change its spots?

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His business became the model for all the other resale companies that sprang up during the early 2000’s.

The next incarnation of the resale scam was the classic “bait and switch”, this is where the client was told they had a buyer for the timeshare, usually a “corporate buyer”. All the seller needed to do was visit the resale office on the Costa del Sol or wherever and attend a meeting with the buyer.

But, there was no buyer, the meeting was a presentation for one of the new Discount Holiday Clubs. These were the  new way to holiday, free from the yearly and rising costs of maintenance fees. The pitch was they would take over your timeshare leaving you maintenance free, but to do this you had to buy a membership to their club. Again these varied in price depending on the length of the membership.

Those prices were obviously inflated, as they would then give a massive discount to take into account the price of your timeshare. For instance, the owner would be told that a 10 year membership would cost £15,900 but they would give you £6,500 for the timeshare, leaving the cost of membership at £9,400.

Another twist to this was the cashback scheme, this was a voucher made out for a large sum to cover the cost of the timeshare plus some of the membership fee, that had to be registered and in 36 months or so you would go through the reclaim procedure and receive at least 75% of the certificate value.

cashback

Incentive Leisure Group and their Designer Way Vacation Club along with Club Class Concierge were the major players in this particular scheme. Both eventually were wound up by the UK authorities.

The next system to emerge was based on the above, this time they were leisure credits, which “could” be used to get discounts on all sorts of goods and services, not just holidays. The same tactic was used, get the client to a meeting and the only way to get out of the timeshare was to purchase the leisure credits and join our scheme!

The most well known are EZE Group, whose owners are awaiting sentence at Birmingham Crown Court and Monster Credits. The latter is now under investigation by the Police after raids by Trading Standards.

We now move to the latest in this long list of innovative frauds, the claims business.

Since the first Supreme Court ruling in March 2015, these have mushroomed, they take on many various forms, from fake law firms to claims management companies.

The pitch varies from firm to firm but one thing is clear, everyone has a case and can claim!

The most sophisticated fraud is one Inside Timeshare has been following for over 2 years, the group of “Fake” law firms we have called the Litigious Abogados family operating out of Tenerife.

Theirs involves clients being told the case has been filed and they can be part of it, all they need to do is pay a certain amount and they will be included in the case being heard within the next month. All the documents look very convincing, even down to very good fake court documents. For more on this search for Litigious Abogados.

There are also many firms operating out of the UK, these are offering “no win no fee” claims, but in order to do this you need to have your timeshare contract cancelled, known as relinquishment. This involves a fee, this can be anything from £4,000 to £8,000 depending on the company. (Beware of this, many have found that after 3 years or so they end up getting demands for maintenance arrears).

sec 75

Once you have paid for the contract to be cancelled, then they will file a claim on the “no win no fee” basis. This does not involve a court case, (once your contract has been cancelled, you cannot take the case to court), it is a Section 75 under the Credit Consumer Act 1974. As you can imagine this is not going to work, the credit card company will deny the payment stating that you have had use of the product and therefore are not eligible.

Section 75 covers, not received the goods or services paid for, company has gone bankrupt, fraudulent transactions. This would not cover the misselling of timeshare, the contract can only be declared illegal in a court and at present the laws only apply to timeshares purchased in Spain.

Now, it can be very difficult to decide which company is genuine and which is not, this is where you need to do your homework.

Some very basic tips are, how long has the company been registered, this can be found out by doing a company search, this will also tell you if they have changed name. If the company has only been registered for say 1 year, then how do they account for their claims of helping hundreds of people, especially if they have testimonials dated several years before they were registered. Also just because a company has a registration, that does not prove they are genuine, anyone can register a company for very little outlay.

Another factor is the officers of the company, the director and secretary, these may be just front people, not the actual owners of the company.

What about the website? Who is it registered to and when was it registered?

whois

Some websites are registered under privacy registrations, these are using a privacy company to register the site for the person. This should set the alarm bells ringing, what have they got to hide?

Payment methods is also a very useful giveaway, any genuine company should have credit card facilities, at least that way you are covered if anything does go wrong. Do not use your card via any method such as PayPal, this is a third party and invalidates your rights under Section 75.

Companies using only bank transfers should be viewed with caution, especially if the transfer is to be made in the name of a private individual. Steer well clear of any company that asks for payment by any other means such as Western Union.

These are just the very basic rules, if in doubt do not do anything, if you require any help in checking the validity of any company that contacts you or one you have found while searching the internet, contact Inside Timeshare and we will point you in the right direction.

Remember do your homework and keep your hard earned cash safe!

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